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Posted by
mlinderman
on 2007-10-07

PUBLIC:

GreenHills Ventures solicited our company to make the introductions to potential investors. Emanuel Martinez at GreenHills Ventures, LLC requested our company to pay them $15,000 upfront for introductions to potential investors. After they collected the money, they prepared the ugliest power point presentation, I have ever seen. I called them non stop for several months asking them to provide the service that we paid for. In the end of one year period Emanuel Martinez finally set up one presentation. I could tell, it was a setup to get him off the hook. As I expected, that was the end of it. They are very experienced rip off artists. Please do not let this happen to you.

I was solicited by an associate of Greenhills to present to Mr. Martinez. I pitched and received 2 days later what has now become the standard MO for Greenhills. I got a consulting agreement from them requiring me to pay them $12k in return for locking me up to only taking money from their investors or having to pay a "break up fee" of a percentage of whatever I raise elsewhere.

The most troubling part is I asked them for references. This was requested 3 weeks ago and so far nothing. Wouldn't a successful firm have at its finger tips a list of people who would take a reference call"

Never a good sign. Does anyone have a positive funding experience with Greenhills that they are willing to share publicaly"

GreenHills solicited us as a potential funding candidate. GreenHills required and accepted a commitment deposit of several thousands of dollars. A long due diligence process was required which the company completed and submitted to GreenHills. GreenHills then began defaulting on its contractual obligations by not returning calls and emails and it became obvious after 15 months of not much going on that GreenHills accepted our money and basically left us holding the bag. GreenHills appears to practice this behavior on a regular basis from what we have seen posted on this site.

We were offered terms and rejected them. We had another meeting in NYC the same day or would not have met with them. I went through the steps to do diligence on GHV to determine whether it was a legitimate opportunity to raise money for our company and determined that it was not.

We rejected GHV terms because:

-They were asking us for money.
-They agreed to provide references, but would never provide them when pressed.
-They were not engaged enough to understand our forecasting leading us to think that they didn't care.
-They would not commit to a valuation. Their contract placed valuation at the discretion of a third party allegedly paid by GHV.
-They refused to put dates and process around the diligence process.
-I could find no record of their ownership of any of the companies they identify as portfolio companies.
-They meet in shared space in the Chrysler building. Not in itself an issue, but they have absolutely no footprint. The space appears to be rented temporarily as needed.

My gut was that Manny's real business is skimming around 15K from start-ups in a "diligence" process that never happens. I was able to confirm with the associate who made our initial contact and is no longer with the firm that in two years of working there he had seen no closed investments and thought that something illegal was happening. I reported the details of our interaction with GHV to the SEC enforcement division.

Posted by
Maybe new but not stupid!
on 2008-12-19

Posted by
kgone
on 2007-10-11

PUBLIC:

The previous poster is dead on. We went through an initial meeting where Mr. Martinez posed as a VC, and then we got the "term sheet", which was essentially a non-refundable, no recourse consulting deal for them under the guise of "due diligence". Once I was done laughing, I got angry, and then just moved on. Don't bother making calls there or taking calls from there.

I actually read all of the posts before "signing" a diligence agreement with GHV and took all the precautions we could - we got a very reduced "fee", went back and forth on the contract multiple times over legal terms, asked for precautions, talked to others, etc, all trying to hedge our bets. Manny and his team (to remain anonymous as some of them are advisors to GHV and not official employees of GHV) legitimately seemed like nice guys and seemed interested/excited in what we were doing. We entered into diligence with them, and spent the next 2 months putting together all of the information they asked for. We built up a good relationship, they asked us questions and for further information, we had lunches, drinks, etc. I believe they even put together an investment memo on our company. I was convinced that this was a fair process and that others were wrong about their previous experiences with GHV. Then, however, one day they went silent. They claimed to be drafting a SPA for us but simply stopped returning emails and phone calls. We never received a formal response one way or another. I would have been fine with them "passing" on the deal but would 1, have liked to know why and get some feedback considering we paid their fees, and 2, would have liked to have been given a response up front instead of waiting around for 2 months for them to get back to us. It was a huge waste of time, and in my mind, an example of some of the worst business etiquette I have ever experienced. Not to mention we turned away other investors because we felt bad about breaking the terms of our arrangement. I used to be on the investor side of things and we would AT THE VERY least give honest feedback even to companies we never went into any sort of process with. I legitimately enjoyed our time in working with GHV until this latest happening and thus I was giving them the benefit of the doubt before posting anything here. That said, with still no response on their end, I felt it was only duty to post about our experience. To have taken up our time, money, and our resources and not even give any official response one way or another just seems unacceptable.

I was contacted by one of the GreenHills' analysts, Sumit. He informed me they found my company's profile on Gust and were interested because they had just made an investment in a similar space and thought there were some synergies between our companies. Initially, this confused me because after describing what their new portfolio company did, it didn't seem to be very compatible. I asked Sumit for some references, which he said he would get together over the weekend and send over a few days later. About a week later, I received a call from Manny. He told me he wasn't sure why he was calling, other than because Sumit asked him to. They didn't seem very organized. He pitched me GreenHills, I described a little of what my business does, and then I asked for a few references that I could speak with, perhaps the company they just invested in as well. Of course, I never received any contacts to reach out to or letters of reference. This firm seems to be disorganized and poor at following up on their promises. Not the type of money I would want involved in my business. I would suggest doing thorough research with any VC firm and their partners before moving the process forward or you could be strung along as in this example.

We were introduced to GreenHills and Manny. Despite the concerns I had from the comments posted here, we continued to have discussions with them. We eventually received a very detailed, professional term sheet which had, as expected, a commitment fee. Before signing the term sheet, we asked for references from other private companies that had actually secured investment from GreenHills. Manny supplied a couple of references for other companies that were in a similar stage as us (had secured term sheets but hadn't completed due diligence or received any actual money from them), but Manny was not able to provide any reference from any company that had actually completed a financing with them. As I pushed for real references, GreenHills then got very quiet. Surprise, surprise. We never signed the term sheet since we could not effectively reference them. I can't say whether they are a scam or not, but definitely do your homework and make sure you get real references if you decide to proceed. I would also look into a case that is being brought against GreenHills by a company called 10-Acious in Kentucky. Reading through the complaint is fascinating stuff and certainly will make you wary of GreenHills!

Does anybody know of a company that GreenHills Ventures has funded? I have read all the comments but don't see any references to actual investments. if they are not making investments perhaps they should not be listed here and if they are it would be wise to show some examples.

Posted by
mlinderman
on 2007-11-14

PUBLIC:

"On October 7, 2007 Mlinderman posted a message on this website (The October 7th Posting") concerning the Company's engagement of GreenHills Ventures, LLC and Emanuel Martinez to perform the required due diligence on the Company and to assist in identifying certain investors from GreenHillsVentures Wealth Management Group (which is a separate and distinct entity from the GHV Fund, LP, an early stage venture fund). I hereby unequivocally retract and rescind the October 7th Posting.
The Posting made reference to a $15,000 fee that was paid by the Company to GreenHills Ventures.
I think and believe that the fee received by GreenHills Ventures was used to cover only a portion of the actual out-of-pocket expenses and the Company has been advised the actual expenses incurred by GreenHills Ventures went over the fee paid for completing its due diligence and preparing a due diligence package and certain investor presentations for use by the Company. I also note that GreenHills Ventures and Emanuel Martinez succeeded in bringing an investor group to the Company with the appropriate background and expertise, but ultimately that investor and others decided not to invest in the Company.
The Company apologizes for making the Posting in haste and causing questions to be raised regarding the ethics and the good reputation of both Emanuel Martinez and the GreenHills Ventures team.
I do not and have never meant to suggest that GreenHills Ventures or Mr. Martinez acted unethically, or illegally, or improperly in connection with its agreement with the Company. Accordingly, I hereby retract the October 7th Posting in its entirety"